Tesla Seals $2 Billion SolarCity Deal

More than 85 percent of Tesla shares voted in favor of the deal.... The deal, valued at about $2 billion, integrates the maker of Model S and upcoming Model 3 sedans with the installer of rooftop solar panels.

Shareholders are signing off on Musk’s plan to combine and more efficiently run two companies that have a track record for fleeting profits and frequent fundraising needs. Tesla has lost about $4.8 billion in market capitalization since its initial offer to buy SolarCity on June 21, while the latter company’s value declined by about $86 million.

Tesla has forecast SolarCity will add $1 billion in revenue to the combined company next year and $500 million in cash to its balance sheet over the next three years. Joining Tesla’s retail network with SolarCity’s installers and consolidating the two companies’ supply chains may result in an estimated $150 million in cost synergies within a year.

Musk owns 21 percent of Tesla and 22 percent of SolarCity, making him the largest shareholder of both companies.... The all-stock deal is worth $20.23 per share, a premium of 2 percent based on SolarCity’s closing price Wednesday. The premium was about 35 percent when first announced.

Tesla rose 2.6 percent to $188.66 at the close Thursday, while SolarCity gained 2.9 percent to $20.40.

The quarterly profit Tesla reported last month was the first for the ... company in eight quarters. SolarCity has recorded losses in six of the last eight quarters....

Investor Jim Chanos ... has been highly critical of the merger in part because of the $2.89 billion in SolarCity debt Tesla will be taking on.

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Environmental Valuation & Cost Benefit News covers legal, academic, and regulatory developments pertaining to the valuation of environmental amenities and disamenities, such as clean air, trees, parks, congestion, and noise. We apprise the reader about ways in which costs and benefits are measured, and the results of empirical studies. We hope that this information will allow public and private organizations to comprehend the risks and benefits of various actions, help disputants to resolve conflicts equitably and efficiently, and improve the quality of public policies.

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